China Confidential has identified seven durable, long-term trends and seven potential danger-spots for the Chinese economy in 2014 and beyond.

China pledged at the end of a key conference in Beijing today to achieve “reasonable” economic growth in 2014 while pushing forward reforms to control local government debt and combat industrial overcapacity. We think that 7% is the most likely official target for GDP growth next year, a rate of expansion that could accommodate a forceful reform drive that may be directed particularly at industrial overcapacity and debt-ridden local governments.

The Communist Party of China announced today a series of rural land reform initiatives that should significantly boost rural wealth and increase the amount of land under development in China. This is in line with our expectations that the monetisation of rural land would be at the heart of the government’s reform efforts (CC Oct 17, Big Call), potentially unlocking a massive source of economic dynamism.

The Communist Party of China (CPC) signalled today that it plans to push forward with key reforms to its rural economy, in what we think is the most significant of a series of initiatives outlined during a key four-day political conclave in Beijing. 

China’s pork imports are set to rise slightly YoY in 2013, helped by an ongoing rebound in local prices that make imports more economical. New data from the US Meat Exporters Federation (USMEF), seen by CC, puts China’s 2013 pork imports at 1.39m tonnes of pork and variety meat (offal), up from 1.36m tonnes last year. While the USMEF data includes shipments to Hong Kong, we believe over 90% of the 1.39m tonnes are ultimately consumed in the mainland. China’s pork imports rose 12% YoY in 2012.

The monetisation of rural land and real estate is one of the last great untapped assets that China can use to spur economic growth. Our grass-roots research shows that such monetisation is spreading fast and set to gather pace.

China’s leading meat producer Shuanghui’s recent acquisition of US firm Smithfield Foods should leave it in pole position to benefit from consumption upgrade and consolidation trends already underway within the industry.

The China Confidential Rural Wealth Index softened to 53.8 in August, from 55.8 in July, due to weaker vehicle sales and questions over the ultimate increase in grain yields in 2013. On the positive side, demand for land remains strong, while pig and pork prices continue to recover. The government is delivering on promises of increased credit for rural areas, though access to credit for bona fide farmers remains a challenge.